Byline: Sharon Edelson
NEW YORK — As Bloomingdale’s completes plans for its big move west, store executives already have their eye on further expansion, both internationally and into other major U.S. markets.
Allen I. Questrom, chairman and chief executive officer of the parent Federated Department Stores, told WWD the Pacific Rim, Canada and Mexico are probable areas for international growth within the next two years.
“We’ve had some ongoing offers from people around the world asking whether we would do a partnership, but we have not done anything on that front because we want to make sure we have taken care of our national interests,” Questrom said Tuesday. He emphasized Bloomingdale’s expansion potential to “every major market in the U.S.”
While Questrom declined to specify how many new Bloomingdale’s could open in the U.S., in a December 1992 interview he said in five years the chain could have 25 units. Bloomingdale’s currently operates 16 stores, all in the U.S.
“If we do make a move internationally, it will be within in the next year or two,” he added.
While there are no specific plans in place at the moment, Questrom said, “The Pacific Rim is going to be the fastest-growing part of the world economy, so that would be a natural extension. There could be a number of places in Asia. Clearly, Canada is a potential market. It’s a different way of doing business, but it would be a consideration. Down the road, we also envision opening in Mexico City.”
As for U.S. expansion, Questrom said, “any major city that has arts and culture” could support a Bloomingdale’s.
“I can see stores in San Francisco, Detroit and more expansion in Chicago, where we are opening another store,” Questrom said. “We also have opportunities in Atlanta, Houston and Dallas. We were in Dallas once before, and because we didn’t follow through on all the issues of being a national store, we fell out of favor with our customers there. That doesn’t mean Dallas couldn’t support a Bloomingdale’s if it was executed properly.”
Since taking over Bloomingdale’s four years ago, Michael Gould, chairman and ceo, has been focused on reducing expenses, while enhancing service and housekeeping. In addition, Gould has increased regular-priced selling and improved gross margin performance. Reportedly, it had a strong 1994, with operating profits rising to 9 percent of sales, from around 5 percent in 1993. Sales rose to $1.3 billion last year from $1.1 billion the previous year.
“I think the Bloomingdale’s franchise, particularly as it gets stronger in the U.S., becomes a more enviable franchise not only from a Federated point of view, but from the point of view of developers who want to have it,” Gould said. “When you look at the international tourist that’s in the store, you can see that we would have a very strong international following north of the border, south of the border and in Asia.”
In the past, Japan and Moscow have been mentioned as possible sites for Bloomingdale’s stores.
Bloomingdale’s is planning to enter the Southern California market in the next two years with a store in Beverly Hills.
Gould said Bloomingdale’s has found a site on Beverly Drive, north of Wilshire Boulevard and is working to finalize the deal.
“I think we have great opportunities particularly in California and more opportunities in the Northeast,” Gould said. “North of Manhattan all we have is a store in White Plains and a store in Chestnut Hill, Mass.”
Bloomingdale’s is a cornerstone of Federated’s master plan to restructure around three department store tiers, with Bloomingdale’s at the high-end of the price spectrum, Macy’s in the middle-to-better zone and Stern’s being the value-oriented format.